Nuclear industry bemoans Clean Power Plan stay

February 23, 2016 4:45 AM

Concrete being placed in the auxiliary building in January 2015 at the Vogtle Electric Power Station. Two Westinghouse AP1000 reactors are assembling in Georgia and, after several years of delay, are scheduled to start producing electricity in 2019 and 2020. When they do, the state’s nuclear share of power generation will rise from 22 percent to 27 percent.

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WASHINGTON, D.C. — For an industry that said it was ignored by the Clean Power Plan, nuclear interests sure took it hard when the Supreme Court halted the rule earlier this month.

Existing nuclear power plants didn’t get any credit for being the largest source of carbon-free electricity in the country, advocates said. There are no direct incentives built into the rule to subsidize new nuclear plants or keep existing ones from retiring early, as more than half a dozen have done or plan to do.

And yet, when the Supreme Court stayed the rule while its merits are hashed out in a lower court, it sent shockwaves through the industry that was counting on the states’ compliance plans to give nuclear energy the credit that the federal government didn’t.

“Prior to a week ago, the big question we’ve been asking is what does the energy system look like to meet the Clean Power Plan,” said Tina Taylor, director of strategic programs with the Electric Power Research Institute, speaking at Platt’s Nuclear Energy Conference in Washington D.C. on Wednesday.

The Palo Alto-based research group is studying the possibility of extending the life of the nation’s fleet of 99 nuclear reactors beyond 60 years of life. Without it, all but two of these plants will be shut down by 2050, taking with them nearly 20 percent of the electric capacity in the U.S.

“Trying to replace this much carbon-free electricity with other sources,” would cost $100 billion if the country intends to get to the carbon reduction goals outlined in the Clean Power Plan, Ms. Taylor said. That is, a 32 percent reduction in carbon dioxide emissions by 2030 from 2005 levels.

“It’s imperative to remember that if you care about the climate, if you believe we need to make significant progress there, it’s the electric sector that’s going to carry the load,” said David Brown, senior vice president of government affairs with Exelon Corp. “We will need to decarbonize and it’s going to be nuclear that carries the bulk of that.”

Chicago-based Exelon has made no secret that it’s considering closing a handful of nuclear plants ahead of their license expiration as cheap natural gas and low demand for electricity push down power prices, while the cost of operating these plants climbs.

Across the country, five nuclear plants have already shut down or been put on the early retirement list.

“Without any clear market signals, without any clear indication of where we’re going with carbon, it’s hard to make a decision” to pump money into existing plants that need capital improvements, said Anthony Ianno, managing director at Morgan Stanley,

“From a nuclear perspective, there was a lot of optimism around the Clean Power Plan,” he said.

The mood at the Platts conference was somber, but not resigned.

Sure, the nuclear renaissance that the industry banked on, that federal nuclear regulators staffed up for, didn’t happen. Coal is still the fastest growing fuel in the world and natural gas prices are projected to stay relatively low for as long as the eye can see.

Perhaps it’s not surprising that the bullishness came from Stan Wise, chairman of the Georgia Public Utility Commission, which is overseeing the construction of the nation’s first new nuclear reactors in three decades.

Two Westinghouse AP1000 reactors are assembling in Georgia and, after several years of delay, are scheduled to start producing electricity in 2019 and 2020. When they do, the state’s nuclear share of power generation will rise from 22 percent to 27 percent.

Georgia is one of the states opposing the Clean Power Plan in court. Mr. Wise said the decision to stay the rule was appropriate and welcome.

“With or without the Clean Power Plan, we’re seeing a transition to go away from coal in a strong coal state,” he said.

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